Burnt slot machines are seen inside the Casino Royale after it was torched by armed men in Monterrey. Photograph: Stringer/Mexico/Reuters

Until recently, Monterrey was seen by the rest of Mexico as an oasis of prosperity and peace amid the violence of the country's drug wars. But this week's attack on a casino, in which at least 52 people died, was a reminder that nowhere is safe.

The victims, mostly women, died after armed men set fire to the Casino Royale, which was filled with gamblers and staff, on Thursday. Rescue workers were continuing to search the remains of the two-storey building for bodies on Friday.

Mexico's president, Felipe Calderón, declared three days of national mourning during a televised address in which he called on Mexicans to unite behind his government's controversial offensive against the drug cartels, which has coincided with a dramatic escalation of violence around the country.

"We are confronting true terrorists," Calderón said. "We have to combat them with more force. They cannot be the owners of our streets, our cities and our future."

He also laid part of the blame for what he called "the tragedy we are living in Mexico" on the failure of the US to control its drug consumption and prevent Mexican cartels from easily replenishing their arsenals across the border. "We are neighbours, we are allies and we are friends – but you are also responsible," the visibly angry president said.

A surveillance camera outside the casino filmed a Mini Cooper, followed by two larger cars, stopping by the building at 3.40pm on Thursday.

Armed men rushed in, carrying containers of what the authorities say was probably petrol. The video shows the convoy driving away at the same time as customers and workers ran from the scene just as black smoke billows into view.

The attack on the casino is one of the worst atrocities so far in the drug wars, in which more than 40,000 people have been killed since the president launched a military-led crackdown on organised crime in December 2006. "There was a time when people moved from the capital to Monterrey because they felt safer there," Jorge Chabat, a drugs analyst, said. "Now they are looking to come back."

Monterrey, the capital of the state of Nuevo Leon, is about 140 miles from Texas and is a hub for big business. The area has also long been attractive to traffickers as a strategic break in the journey for drugs going north and money and weapons flowing south.

This all changed after burgeoning tensions between the Gulf cartel and their former enforcers, the Zetas, developed into a full-scale war that began in the north-eastern border state of Tamaulipas early last year and spread to Nuevo Leon.

According to government figures, murders in Nuevo Leon jumped from 267 in 2009 to 828 in 2010. That record had already been surpassed by mid-June this year.

The governor, Rodrigo Medina, told a press conference that police were investigating whether the attack on the Casino Royale had been revenge for unpaid protection money. He refused to elaborate on other possible lines of investigation or identify which criminal group was suspected of being behind the arson.

Emergency services spokesman Reynaldo Ramos said 42 of the victims were women, and almost all the bodies were discovered inside the building's toilets.

Further bodies were found in an office where it seems people sought refuge after running from the gunmen and failing to find open emergency exits.

One survivor, who identified herself as Alejandra, said: she was near the entrance when the armed men entered and screamed at them to get out or die. "I heard shots, but I didn't look back. We got out."

The impact of the tragedy was further increased by the location of the gambling centre

that featured bingo and slot machines in a middle class area of the city.

Previous attacks on obviously civilian populations have tended to focus on peasants, urban workers, drug addicts and other vulnerable sectors. Exactly a year ago, 72 mostly Central American migrants were killed at a ranch in Tamaulipas.

Local business leaders were notably quiet in the immediate aftermath of the tragedy but, in recent times, have underlined their concern about the crumbling image and confidence of a city they once felt proud of.

"Nuevo Leon has been an example for the nation because of its drive, and it hurts us that today the state is associated with corruption and insecurity," Alsonso Garza Garza told La Cronica de Hoy, speaking just a day before the attack. "This cannot get worse." It appears he was wrong.

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